State-owned football: an SOS for Europe?

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Two of European football’s top sides have in recent years been essentially bankrolled to success by nation-states. The Qatari Investment Authority have owned French giant Paris Saint Germain since 2011, and the Abu Dhabi United Group purchased Manchester City in 2008. A third appears poised to join them as a takeover of Newcastle United, from Saudi Arabia’s Public Investment Fund (worth in excess of $300bn), seems imminent. Newcastle United will now have to navigate a football world alien to many of its fans and players. Its every transfer will be caveated, its every success taken with a pinch of salt. State-owned sides have already transformed Europe’s elite clubs’ collective mentality on spending. The addition of a third state-owned club will only serve to reinforce this – to the detriment of the wider European game.

Manchester City rose to become a dominant force after their takeover in 2008. The summer before Newcastle had finished thirteenth, City fourteenth, but following the subsequent takeover by Mike Ashley in the summer of 2007 and the ensuing Abu Dhabi takeover in Manchester, the clubs moved in entirely different directions. Following an initial spout of popularity for his matchday antics, a chasm quickly emerged between the fans and Ashley, as he managed his investment in the same austere manner he managed his many others businesses. A scattergun, fan-appeasing managerial merry-go-round with Kevin Keegan, Joe Kinnear and Alan Shearer took hold before relegation at the end of the 2008/9 season. Only once more have they been relegated, in 2015/6, with consistent Premier League football for the best part of a decade. However, the chasm could not be reconciled; various walkouts and protests at a lack of progression on the pitch were made to no avail. This takeover will almost guarantee the significant investment desired by the Newcastle fans. But at what cost? The club may effectively become Saudi Arabia’s pinboard – its European ambassador. This will sit uncomfortably for some fans. But success will surely numb the conversation, in the same way that it has done at Manchester City.

The takeover further clouds morality in the game. Saudi Arabia’s history of human rights abuses looms over any prospective takeover, and asks fans fundamental questions about the intersecting relationship between politics and football. Since 2008, as two states have cemented themselves at the top of the European game, we have become much more aware of the relationship. However, Real Madrid and Barcelona both indicted in a European Commission ruling deciding there had been illegal state aid granted to them and numerous other Spanish clubs, and broadcasting rights deals to companies such as beIN Sports in the Middle East have demonstrated that the scale of this intersecting relationship stretches much further than just state-owned clubs.

Saudi Arabian involvement may spark a conversation about morality. With Qatari and Emirati involvement, both countries still do not recognise LGBT+ rights, with heavy punishments including the death penalty for homosexual activity. All of this has occurred alongside English football’s attempts to improve its relationship with the LGBT+ community, through the ‘Rainbow Laces’ campaigns and partnerships with LGBT rights charity Stonewall. The concurrence of these influences on the league highlights an inherent hypocrisy within football.

In France, the Qatar Investment Authority has established a hegemonic rule over the Ligue 1 with Paris Saint-Germain. However, QIA has yet to bring desired continental success to Paris. Notably, PSG failed to make even a semi-final of the Champions League since the takeover in 2011. Likewise, the Abu Dhabi United Group controlling Manchester City, who themselves are yet to make the final of the competition, have also failed to make a lasting dent in European football despite consistent success domestically under various managerial reigns.

Neither fanbase has particularly taken to the Champions League. Manchester City, for example, in their one-hundred-point season averaged just under fifty-four thousand inside the Etihad Stadium in the league but just over forty-eight thousand in the Champions League. It is unlikely to take a similar shape with Newcastle’s passionate Toon Army desperate to enjoy every drop of potential European action since the 2002/03 season, in which they beat a Juventus side containing Lilian Thuram, Alessandro Del Piero and eventual Ballon d’Or winner Pavel Nedved.

The inability of Manchester City and PSG to conquer Europe will serve as both an incentive and warning to the PIF ownership group poised to take over. The chance to better their Qatari and Emirati counterparts but a sign of the difficulties of navigating Financial Fair Play rules and the quality of Europe’s current elite. Both Manchester City and PSG have both been found guilty, subject to appeal, of FFP breaches even with aggressive strategies to attempt to get around them: stadium naming rights, backdated sponsorship deals and image rights deals. Expect to see Saudia on black and white strips soon, along with similar disagreement with football’s regulating bodies.

Mohammad bin Salman, the Crown Price of Saudi Arabia, and head of the country’s Public Investment Fund, will be expecting that his latest purchase will be challenging for European silverware by 2030 as part of his Saudi Vision 2030. This is an aggressive timeframe to work in. It took Manchester City just four years to win their first Premier League title, but more than eleven years on, they are yet to taste European success. Equally, PSG took just two years to win their domestic league but are yet to succeed in Europe eight years on. Mohammad bin Salman cannot expect his own oil-backed entity to do the same now having to compete with two state-owned giants as well as other established giants.

The established giants will surely be looking nervously towards events occurring in the North East. The threat of another substantial state-backed side in the market across Europe will cause panic to upper-middle class sides such as Napoli, Atletico Madrid, Tottenham and Dortmund, where players aren’t on the super-wages of sides like Manchester City, Juventus, Real Madrid and PSG. This may bring about an increasingly competitive race within domestic leagues – possibly allowing teams like Getafe CF, Wolverhampton Wanderers and Borussia Monchengladbach to enter the competition.

Further worries will arise in the market inflation that a new spender will bring both to transfer fees and wages. The value in the market has plummeted following the Neymar and Kylian Mbappe deals of 2017 to PSG – creating problems for all Champions League teams with the added premium that now arises from dealings with fellow Champions League sides.

With the ongoing Coronavirus pandemic, it may well be necessary to sell for even the middle class across Europe – Lille and AZ Alkmaar may struggle to keep their talents if finances dictate. An immediate deflation in transfers is likely given the nature of the pandemic affecting all clubs. But further inflation, particularly after a period of replenishing financial stocks and the emergence of Newcastle, could drastically alter domestic football across Europe.

A potential Arabian triumvirate may soon reign supreme over European football. Their influence on transfer fees and wages amongst Europe’s elite will have a trickle-down effect that will fill the game with more money but less meaning. Saudi Arabia’s PIF takeover at Newcastle United will further reduce the chances of outstanding runs in the Champions League by unfancied teams, like those Ajax, Roma and Monaco have produced in recent years. Whilst Newcastle fans can, and should, enjoy the spoils that investment will bring, the potential effects on the wage bills will see a further disparity in the finances that separate Europe’s elite and the middle classes. This will be to the detriment of the wider European game, creating a new ruling elite of only the super wealthy – further sovereign wealth funds like that of Kuwait, Azerbaijan and Brunei may sense an opportunity. We may reach the stage as football fans, wherein the moral quandary to supporting our favourite teams in our favourite competitions indirectly legitimises abuses across the world. A clouding of morality may turn into a thunderstorm over European football.